Knowing how to price your crafts is difficult for anyone who is trying to make a business out of their homemade crafts. However, knowing how to price your crafts is one of the key components to actually making a profit out of your work.
One of the biggest mistakes that crafters make is actually under pricing their craft work. By following these tips and guidelines, you can figure out how much your crafts are worth, how much you should charge for your crafts, and how you can make a profit from doing what you truly love.
1. When you are at a trade show or if you are selling in a store, make sure that your pricing information is clearly marked and easy to see.
Many people at craft shows and craft expos will walk right by a booth if the pricing information is not easy to find. Ensure that prices are clearly marked for each piece that you are selling.
2. Check with the organizer/promoter of trade shows or the owner of craft stores.
Whether you are selling your crafts at a trade show or vending them at a local craft store, check with the promoter or the owner of the venue. Ask them what their normal price range is for similar products. Then you can price your own wares at comparable prices so that you are neither too far over the prices or too far under the typical prices.
3. Decide whether you want to sell for wholesale prices or retail prices.
If you are selling at a trade show, then you will want to decide whether you are going to show the wholesale price or the retail price of your product.
Most buyers are trade shows-buyers who are going to market a substantial amount of your product-expect to pay a 50% markdown from your retail price. Sometimes this price is referred to as the keystone price. If you are marking the prices as retail, then ensure that you clearly display the markdown or the discount amount.
However, you might prefer to simply mark the wholesale price of your products. However, ensure that you make it clear that you are displaying the wholesale price, or else they will be examining your wares and thinking that they will be paying half of what is advertised.
4. Determine your wholesale price of your product.
1. Decide how much you are going to be paid per hour to make your products.
2. Multiply this hourly wage by the number of hours that will be worked per week. You have now determined your weekly cost of labor.
3. Work out what the total cost-of-supplies is for one finished product. This is absolutely everything that you have to use to produce a product, from material to glue to staples to raffia to wood to paint.
4. Work out how many products you or your employee can produce in one week.
5. Now take the cost of supplies-per-piece. Multiply this number by the number of products that will be made in one week. This means that if you work out a supplies-per-piece cost of $1, and you can create 75 products per week, you will have a total of $75.
6. Now, add this weekly cost of supplies-per-piece and add it to your weekly cost of labor. Let’s say that you worked out your weekly cost of labor to be $300. Now you will have a figure of $375.
7. Divide your figure by the number of items that you produce in a week. $375 of parts plus labor divided by 75 products per week comes to $5 for each product that you create.
8. If you are determining the wholesale price of each product, multiply the number by two. Now you have a retail price of $10. But your wholesale price is $5.
9. Check out other products that are for sale. Is your pricing similar?
10. If you have a higher price than other similar products, then you have to cut the amount that you pay yourself per hour or you should buy supplies that cost less. Or perhaps you need to increase the time of production.
11. If your price is a lot lower than other similar products, then you need to up your price.